Category Archives: Trademarks

Buying competitor’s trademark as AdWords not fair use; infringement case to head to trial

[Thanks to Professor Eric Goldman for notifying me of this case.]

The U.S. District Court for the District of Minnesota has denied summary judgment motions filed by both parties in a trademark infringement case concerning the purchase of sponsored listings on Google and Yahoo!. The court held that the defendant’s practice of purchasing search terms incorporating its competitor’s registered trademark is not protected by the doctrine of fair use. The court also held that the plaintiff had presented enough facts to show that a triable issue existed as to trademark infringement. The case is called Edina Realty, Inc. v. TheMLSonline.com.

Defendant TheMLSonline.com, a real estate brokerage firm, contracted with Google and Yahoo! to purchase several search terms incorporating variations of plaintiff’s registered trademark EDINA REALTY. Accordingly, when Google and Yahoo! users did a search for “Edina Realty,” a link to the defendant’s website appeared as a sponsored link above the link to plaintiff’s website, which appeared in the “natural” search results.

Plaintiff filed a federal lawsuit alleging, among other things, that defendant’s conduct was trademark infringement. Both parties moved for summary judgment on the question of infringement.

In denying both motions, the court considered the following three issues:

(1) Whether defendant’s purchase of key words was “use in commerce” as contemplated by the Lanham Act,

(2) Whether plaintiff presented sufficient evidence of likelihood of confusion to survive summary judgment, and

(3) Whether defendant’s purchase of the search terms was permissible under the doctrine of “nominative fair use.”

On these issues, the court answered, yes, yes, and no.

PURCHASE OF SEARCH TERMS AS “USE IN COMMERCE”

Without lengthy analysis, the court held that the defendant’s purchase of search terms did constitute use of the plaintiff’s mark in commerce. The court noted that although defendant’s use was not “conventional,” the purchase of terms comprising the marks, in order to generate sponsored link advertisements, satisfied the definition of use in commerce as provided in 15 U.S.C. §1127.

The court also relied on the case of Brookfield Communs., Inc. v. W. Coast Entm’t Corp., 174 F.3d 1036 (9th Cir.1999) (finding metatags to constitute use in commerce), to hold that defendant had “used” plaintiff’s mark.

EVIDENCE OF LIKELIHOOD OF CONFUSION

To assess plaintiff’s evidence of likelihood of confusion, the court analyzed six factors as instructed by the case of 3M v. Rauh Rubber, Inc., 130 F.3d 1305 (8th Cir.1997).

Strength of the owner’s mark. In this case there was no dispute that the plaintiff’s mark was descriptive, thus the court considered it “relatively weak” in assessing the evidence of likelihood of confusion.

Similarity between the owner’s mark and the alleged infringer’s mark. There was no dispute that defendant had used words identical to plaintiff’s mark in purchasing the search terms. Accordingly, this factor weighed in favor of the plaintiff.

Degree to which the products compete with each other. The evidence was undisputed that the plaintiff and defendant were in direct competition with one another. This factor also weighed in favor of the plaintiff.

Alleged infringer’s intent to pass off its goods as those of the trademark owner. On this factor, the court held that there was a genuine dispute as to material facts showing that the defendant intended to trade off the plaintiff’s goodwill. The defendant claimed that it had no bad intent, demonstrated by the fact that it had, on various occasions, directed confused customers back to the plaintiff. On the other hand, the plaintiff argued that defendant’s persistence in using the terms EDINA REALTY to generate sponsored links after being warned of potential infringement showed the defendant’s unlawful intent.

Incidents of actual confusion. On this factor as well, the court held that there was a genuine dispute of fact. Plaintiff had brought forth evidence that potential customers had called and e-mailed the defendant, inquiring about plaintiff’s properties. Defendant, in turn, offered what it believed to be legitimate explanations for these calls. Without deciding whether there was enough evidence to show actual confusion, the court concluded that there was enough evidence to raise a triable issue as to the likelihood of confusion.

Degree of purchaser care. The court concluded that there was a genuine issue of fact on the degree of care that the parties’ customers would exercise. Defendant argued that consumers exercise a great deal of care in selecting a broker, because real estate is a long term investment. On the contrary, plaintiff argued that because surfing the web is so easy, consumers do not put a lot of effort into the selection of a broker. Furthermore, plaintiff pointed to a study showing that nearly two thirds of Internet users cannot distinguish between sponsored and “natural” search results. Because of these conflicting views taken by the parties, the court concluded that a triable issue as to the degree of purchaser care remained.

Accordingly, the court denied plaintiff’s motion for summary judgment on the question of infringement, and the case will proceed toward trial.

NOMINATIVE FAIR USE

The court wasted no time in shooting down defendant’s argument that its purchase of plaintiff’s mark as search terms was protected as a nominative fair use. The court applied the test set forth in the recent case of Century 21 Real Estate Corp. v. Lendingtree, Inc., 425 F.3d 211, 222 (3rd Cir. 2005).

The court held that the defendant could have easily described the contents of its website for purposes of generating search results without using the plaintiff’s name. Additionally, the defendant’s use of the plaintiff’s mark in the sponsored results did not reflect the true competitive relationship between the parties. The court believed that the defendant could have done more to prevent an improper inference regarding the relationship.

Edina Realty, Inc. v. TheMLSonline.com, (Slip Op.) 2006 WL 737064 (D. Minn. March 20, 2006).

No relief for prostitution website owner

Court wouldn’t enter injunction where plaintiff had “unclean hands”

Plaintiff First Global Communications operates a website called “World Sex Guide.” In 2000, First Global got a federal trademark registration for the name of its site, to be used in connection with “guides in the field of travel and entertainment.” Defendant Powertools Software was the web developer that First Global hired to build the site.

First Global sued Powertools in federal court in the state of Washington, claiming that Powertools had set up several other websites that were illegally trading on the goodwill associated with the World Sex Guide trademark, and diverting visitors from the site. This act of diverting traffic was especially egregious, First Global claimed, since most of the content on the website consists of “travel reports” submitted by the site’s members. First Global asked the court to enter a preliminary injunction, ordering Powertools to stop diverting traffic and to turn over several domain names.

As it turns out, First Global’s site is a bit more than merely a guide to “travel and entertainment.” In fact, the site consists largely of information about how and where to pick up prostitutes, as well as advice on avoiding law enforcement efforts. Because of its content, the court determined that the website served an illegal purpose.

In reaching this conclusion, the court rejected First Global’s argument that the site’s content does not illegally advance prostitution. It also rejected First Global’s argument under the First Amendment, holding that “speech that aids or abets criminal activity can be prohibited.”

The court determined that entering an injunction “would have the effect of encouraging illegal activity and would serve an unconscionable purpose.” Relying on the equitable maxim that “those who seek equitable relief must come to court with clean hands,” the court refused to enter a preliminary injunction against Powertools.

First Global Communications, Inc. v. Bond et al., 2006 WL 278566 (W.D. Wash., Feb. 3, 2006).

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Mall owner uses Section 43(a) of Lanham Act to successfully challenge domain name registrations

A few days before the public groundbreaking ceremony for the shopping mall that would be known as Provo Towne Centre, Plaintiff Rasmussen, unaffiliated with the mall, registered the domain name provotownecentre.com. Claiming an intent to start an online shopping mall, he also registered the domain names provotownecentre.biz and provotownecentre.net.

In an arbitration proceeding brought by the owner of the Provo Towne Center mall before the World Intellectual Property Organization (“WIPO”) pursuant to the Uniform Domain Name Dispute Resolution Policy, Rasmussen was found to have registered the domain names in bad faith. As an “apparent appeal” of the WIPO decision, Rasmussen filed suit in a Utah federal court against the mall owner, General Growth Properties, Inc.

General Growth filed several counterclaims against Rasmussen, alleging, among other things, violation of Section 43(a) of the Lanham Act, 15 U.S.C. §1125(a). It then moved for summary judgment on that claim. (It is interesting to note that although the case had at its root the use of a domain name, the opinion makes no mention of the Anticybersquatting Consumer Protection Act, another portion of the Lanham Act specifically drafted to address a cybersquatting case like this one.)

The court granted General Growth’s motion for summary judgment, and ordered the domain names transferred.

In its opinion, the court considered two elements to find that no genuine issue of material fact remained in regard to the alleged violation of Section 43(a). First, the court found that although General Growth’s mark “Provo Towne Centre” was merely descriptive of the services that General Growth provided, there was “exhaustive, unrebutted evidence” to show the term had acquired secondary meaning. Thus, it was protectable as a trademark.

Secondly, the court considered whether the use of the domain name would create a likelihood of confusion with General Growth’s “Provo Towne Centre” mark. It found that confusion would likely occur. The court determined that the marks were virtually identical, and that the bad faith intent found by the WIPO panel had been confirmed in the record before the court. It found the similarities between the parties’ “use and manner of marketing the services” was “problematic,” comparing Rasmussen’s intended online shopping mall with General Growth’s establishment of a successful site promoting the Provo Towne Centre mall. The court also found that the lack of sophistication in the affected consumers and the strength of the Provo Towne Centre mark weighed in favor of a finding of likelihood of confusion.

Accordingly, because General Growth had a protectable mark, and because Rasmussen’s use of the domain name would likely cause confusion, the court held that no reasonable jury would find in Rasmussen’s favor under Section 43(a).

Rasmussen v. General Growth Properties, Inc., 2005 WL 3334752 (D. Utah, December 7, 2005).

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Fallwell.com back in the hands of gripe site owner

Fourth Circuit reverses earlier decision of district court which had found in favor of TV evangelist Jerry Falwell.

Apellant Lamparello developed a website at www.fallwell.com that was critical of Reverend Jerry Falwell’s political views. The home page contained a disclaimer stating that the site was not affiliated with Reverend Falwell or his ministry, and provided a link to Reverend Falwell’s site. Lamparello never sold any goods or services from fallwell.com.

Reverend Falwell sent cease and desist letters to Lamparello in 2001 and 2003, demanding that Lamparello stop using fallwell.com. After receiving these letters, Lamparello filed a declaratory judgment action, asking the court to determine that the use of fallwell.com did not infringe on Reverend Falwell’s rights. Reverend Falwell countersued, claiming, among other things, trademark infringement and cybersquatting. The district court sided with Reverend Falwell, and ordered the domain name transferred. Lamparello sought review.

On appeal, the Fourth Circuit reversed. It held that the district court had wrongly found trademark infringement, as there was no likelihood of confusion between the respective sources of website content. The court emphasized that Lamparello’s website in no way resembled Falwell’s, and that Lamparello had created the site only as a forum for criticizing ideas. Most importantly, the parties did not offer similar goods or services. There had been no actual confusion, which was made clear by reports of certain visitors to Lamparello’s site who “quickly realized that Reverend Falwell was not the source of the content therein.”

The court also determined Reverend Falwell had failed to demonstarte that Lamparello had registered the domain name with a bad faith intent to profit. Such a showing is necessary to a claimant’s success under the ACPA, 15 U.S.C. §1125(d). Of particular importance was the fact that Lamparello had used the domain name “for purposes of comment, [and] criticism,” such use constituting a “bona fide noncommercial or fair use” under the ACPA.

The balance of the various “bad faith factors” found at 15 U.S.C. §1125(d)(1)(B)(i) also weighed in favor of Lamparello. Specifically, as noted in the portion of the opinion dealing with trademark infringement, the court found that there was no likelihood of confusion as to the source or affiliation of the website content. Further, Lamparello had never attempted to sell, to Reverend Falwell or anyone else, the rights in the fallwell.com domain name, nor had he engaged in the practice of registering numerous domain names.

The court’s opinion addressed several other issues raised by the parties not necessary for the final determination. For example, the opinion includes a thorough analysis of the initial interest confusion doctrine. Such an analysis was not necessary, as the Fourth Circuit has never adopted the initial interest confusion doctrine. In any event, the case is an interesting and thought-provoking read on a modern issue of trademark law.

For a more thorough analysis, be sure read Professor Eric Goldman’s remarks over at his Technology & Marketing Law Blog.

See also Mark Partridge’s post on the case at his Guiding Rights Blog.

Lamparello v. Falwell et al., No. 04-2011 (4th Cir., August 24, 2005).

Trademark on Supplemental Register no help in domain name proceeding

A WIPO administrative panel recently denied a request to transfer the domain name oilchanger.com, finding that the complainant had failed to prove the essential element of enforceable trademark rights in the domain name.

Oil Changer, Inc., operator of numerous oil changing facilities in California, claimed that its registration of the marks OIL CHANGER and OIL CHANGERS on the Supplemental Register with the United States Patent and Trademark Office served as prima facie evidence of its ownership and the validity of the marks. However, the panel refused to recognize any such presumption for marks on the Supplemental Register.

The panel determined that registration on the Supplemental Register was an admission that the marks were not inherently distinctive at the time the applications for them were filed. Further, the panel determined that registration on the Supplemental Register was evidence that there were no common law rights at the time of the applications. Finally, there was insufficient evidence in the record to show that the complainant’s marks had acquired secondary meaning.

Oil Changer, Inc. v. Name Admin., Inc., Case No. D2005-0530 (July 28, 2005).

Court zaps ISP’s request to prohibit TV network’s use of CURRENT trademark

Injunctive relief denied in trademark suit against Current TV, as court finds broadband services and television network services “not related or only tangentially related.”

Plaintiff Current Communications provides broadband over power line (BPL) services to about 2,100 customers in the Cincinnati, Ohio area. It owns several trademarks used in connection with these services. Defendant Current Media operates the new television network Current TV, which seeks to “democratize” television by airing content that users have submitted through the Internet.

Current Communications sued Current Media for, among other things, trademark infringement, and asked the court to prohibit Current Media from using the word “Current” in connection with its newly-launched network. The court denied the plaintiff’s request, and refused to enter an injunction.

The court went through a thorough analysis of the “likelihood of confusion” factors to determine that injunctive relief would not be proper. Current Communications had not shown that it would likely succeed on the merits of its trademark infringement claim.

One of the likelihood of confusion factors was the extent to which the services provided by the plaintiff and defendant were related. The court concluded that the parties are not direct competitors, “[n]or is it likely that they will become direct competitors.” Accordingly, the court concluded that there was no likelihood of confusion as to the source of the parties’ services, and injunctive relief would not be proper.

Current Comm. Group, LLC v. Current Media, LLC, 2005 WL 1847215 (S.D.Ohio, Aug. 2, 2005).

Evidence of intentional copying of domain name gives rise to presumption of trademark distinctiveness

Plaintiff Fryer sued his former employee, Bernie Brown (no relation to the author of this weblog), after Brown set up a website for his new competing auto upholstery business. Since 2000, Fryer had maintained the website located at autoupholsterykits.com. In 2002, Brown set up his website at autoupholsterykit.com.

Fryer’s suit alleged, among other things, violation of the Anticybersquatting Consumer Protection Act (“ACPA”), 15 U.S.C. §1125(d). In a motion for summary judgment, Brown argued that the domain name autoupholsterykits.com was a generic term, and thus not subject to trademark protection. He argued in the alternative that if it was not a generic term, it was at least a descriptive term without secondary meaning.

The court denied the motion for summary judgment as to the ACPA claim, holding that the domain name was a distinctive trademark and subject to protection against infringement. The court did some interesting maneuvering, however, to reach this conclusion. In essence, it avoided the real question of whether the domain name may actually be a generic term or merely describe the goods provided. Instead, the court looked to evidence of intentional copying of the plaintiff’s domain name by the defendant.

In so many words, the court conceded that an analysis of the domain name vis-à-vis the goods provided in connection therewith would be like stepping into a quagmire: “The distinctions between generic and descriptive and descriptive and suggestive are often illusory. Accordingly, the Court relies upon the link between the mark’s secondary meaning and the likelihood of confusion as critical.”

So the court analyzed the relationship of intentional copying of plaintiff’s domain name to both the likelihood of confusion and secondary meaning. It noted that “[w]hen intentional copying is at issue, the court may presume the likelihood of confusion.” Further, the court noted that “evidence of deliberate copying establishes a prima facie case of secondary meaning.”

Accordingly, the court denied summary judgment where there were factual issues relating to whether the defendant had intentionally copied the domain name.

Fryer v. Brown, 2005 WL 1677940 (W.D.Wash., Jul 15, 2005).

Has Microsoft forgotten to file a trademark application for the name of its new operating system?

Microsoft has announced that the name of its new operating system coming out next year will be called “Vista.” As of the date of this posting, a search of the records of the United States Patent and Trademark Office reveals no applications on file for the mark VISTA owned by Microsoft. Is this an oversight or merely a consequence of the several day backlog for getting information about new applications online? Perhaps it’s just a load date issue.

Further: More observations on this subject over at Infamy or Praise.

And further: Dennis Crouch over at Patently-O has a this post on the delay one finds in the world of patent applications.